Moody’s takes rating actions on 19 Turkish financial institutions

Moody’s takes rating actions on 19 Turkish financial institutions

ISTANBUL

Moody’s late on June 7 downgraded and placed on review for further downgrade the ratings of 17 banks in Turkey, while also placing on review for downgrade the ratings of two finance companies.

“The downgrades reflect Moody’s view that the operating environment in Turkey has deteriorated, with negative implications for the institutions’ funding profile,” the Moody’s statement said.

Deputy Prime Minister Mehmet Şimşek subsequently wrote on Twitter that Turkish banks are well-capitalized and have a strong asset quality, adding that the country’s banking sector is profitable.

The reviews will focus on the likelihood of further deterioration of the operating environment and its impact on the banks’ standalone credit strength, changes in affiliate support for foreign-owned banks, and weakening of government capacity to support, following Moody’s review for downgrade of Turkey’s Ba2 government bond rating on June 1, the agency stated.

Moody’s noted that the operating environment in Turkey, particularly in terms of market funding, has deteriorated since its last rating action on Turkish banks in March 2018.